Dinesh Divekar
Business Mentor, Consultant And Trainer
Management Consultancy
Senior Manager/freelance Consultant
Arunachala Nataraj
Senior Manager -hr
+3 Others

Thread Started by #nikkie77

Dear All,
Recently it has been brought to the notice of the management that a certian person (Purchase) is submitting inflated bills. This employee has access to various confidential data and is a veteran in the organisation. HR has been asked to deal with this. I need your help in understanding what is the right process and if you could give me some formats of
1. Show cause notice
2. Domestic enquiry
3. Warning Letter etc pertaining to the above.
Can we withhold the salary of the employee till such time the investigation is on if we give him the same in writing.
How to recover the cost?
Looking for urgent help from the fraternity.
24th November 2017
What is the proof held with the organisation about submission of inflated bills?
If there is evidence than first conduct an enquiry and obtain conclusive proof.
Rest all procedure of show cause notices,punishment etc come well after guilt is proved.
Natural justice is vital in the proceedings.
Pl go step by step considering that he is your employee,veteran etc and also suspicion cannot be a substitute for proof.
24th November 2017 From India, Pune
Dear Nikki77,
Our learned member, Mr Nathrao has given the reply in which he has correctly told you to investigate fraud first and then conduct the second enquiry, which will be domestic enquiry to investigate the misconduct of the fraudster. First enquiry should be conducted to investigated to find out not just failure of the persons but system's failure as well. The second one is based on the first one and obviously directed towards persons involved.
You have written that "Recently it has been brought to the notice of the management that a certian person (Purchase) is submitting inflated bills. This employee has access to various confidential data and is a veteran in the organisation."
You have given two sentences but both are unconnected. When you say "bill", do you mean to say invoices submitted by the vendors? In that case were vendors in cahoots with Purchase professional? If yes, how did you discover it and why it was not discovered in the purchase audit? How long was this going on? Also investigate that whether the person has inflicted losses to company and whether he had any personal pecuniary gain?
Since I conduct training for the procurement professionals, I know how they are looked at suspiciously. Therefore, you need to investigate whether there was inadvertent error but to gain brownie points, some smart official has labelled it as fraud?
Secondly, how access to confidential data is connected with padding of the bills is not understood.
Well friend, since you brought someone's integrity under scanner. Therefore, I recommend moving cautiously. What you do should be consistent with principles of natural justice and any shortcuts could prove costly.
Dinesh Divekar
24th November 2017 From India, Bangalore
Hi Nikki,
Adding to comments given by Mr Divekar above, on a precautionary note, let's assume the employee as guilty however it is not proven until domestic inquiry is conducted. On administrative grounds, I recommend you an immediate release of show cause notice. Post this if you satisfied with reply then the matter get's closed. However if a satisfactory reply is not there then suspend the employee for an indefinite period and file a charge sheet against him which would be followed by domestic inquiry.
Ensure you pay the subsistence allowance to the employee during suspension period. 50% of the Basic + DA is to be paid as subsistence allowance for the first 90 days of suspension, after 90 days it will be 75% and post a time period of 180 days it would be 100%. EPF will not be deducted however ESI/TDS will be.
25th November 2017 From India, New Delhi
Suspicion,gossip and innuendo cannot be the basis of show cause notices.
First question
What is the source of information about padding of bills etc?
Are purchases solely done by one single person?
An in-house discreet check on the particular transaction can brig out facts.
Presently as per what is written nature of information is not specified and I wonder what type of show cause notice can be given?
Show Cause Notice is a notice which is sent to any person by any authority i.e. government, employer, government employee’s, passport authority etc, to a any other person in order to reply back with a reasonable cause as to why a particular action shouldn’t be taken against him in regard to the defaulting act done by him.
Now what act of omission has been determined to be have been made out against the senior official??
My advice would be go step by step-investigate and then taken action as per law.
26th November 2017 From India, Pune
Dear colleague,
At this juncture, it appears there are some pointers towards fraudulent acts on the part of purchase guy raising suspicion. But thorough investigation must be conducted to satisfy completely that there is prima facie documentary/oral evidence available which can establish the guilt in full-fledged enquiry required to be conducted later.
If prima-facie investigation shows that the the employee has indulged in serious acts of misconducts, suspend him forthwith pending the issue of the show-cause notice/chargesheet.
Then follow it up by issuing the show cause notice, wAit for his reply and proceed to issue chargesheet and further action of holding domestic enquiry.
Vinayak Nagarkar
26th November 2017 From India, Mumbai
Dear Nikkie, I would suggest, first of all hold a Fact-finding inquiry as it appears you are not clear to the extent of fraud and dishonesty of the employee. The inquiry can be held by any senior person familiar with purchase and finance function. Let him also take hold of the records of the matter and identify the witnesses so that tomorrow when domestic enquiry is held you have all the material to support the charges. After you get the requisite details venture into disciplinary action.
Alternatively, after collecting the details of the fraudulent actions, you can confront him and ask for resignation, if you are in private sector.
27th November 2017 From India, Mumbai
In such type of cases preliminary Enquiry is a must to establish the wrong bills/inflated bills produced. If sufficient proof is available, then go for further steps of disciplinary action. If he is very senior, mentally he will get disturbed when you conduct the preliminary Enquiry itself.
29th November 2017 From India, Mysore
Thankyou all, We conducted a Domestic enquiry and the employee agreed to the charges. The necessary actions are being taken.
1st December 2017
Not withstanding the employee has pleaded guilty,take all evidence on record which by itself should prove that charges are true.
Employee may land up in court and allege pressure etc for pleading guilty.
Take actions as required after compiling all evidence and acceptance of guilt.
2nd December 2017 From India, Pune
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